FLIP 12/3/12: PLAY THE TREND, SCALP CT 12/18/12

BOT TRADING SYSTEM

Flip the 12/3/12 chart and post and you have the 12/18 trading.  This time PA had stalled at the SB after a sell off range run at the end of the Euro Zone trading.  B1 to B8.  Sound familiar?

We had a pre open low, B1, B6 and eventually B8 establish a know risk level for a long at the SB.  The three parts to any trade are the entry, the stop, and the target.

• The entry is a level (easier to see) or a bar-more difficult to read at times.  The entry must have a known risk if the trade does not develop as reasonable expected.
• The stop is at that known risk and will be adjusted as PA develops the expected move.  A stop in profit combined with a target creates a win-win scenario.  Any contract can be traded on a stop-only basis, but there are contracts (6E or CL as examples) that move rapidly.  A substantial move could be limited by a target.  But a trailing stop is likely to capture more of the move.
• The target is the point where you anticipate PA will strike.  It can be a rule, a range, an assumed support/resistance, etc.  Regardless of your target, your objective after entering a trade is to be aware of any reason to exit.

Now that we have the elements for the trade, the known risk was in play for the likely range run to the LB, or +6.25 points later. Add on or conservative longs entered at B10 cross of the EMA.  The strong bull was revealed in the number of bull bars without a PB, and the strong gap from price and the EMA as B15 broke the LB for a run to the BO-5 level.   Buyers returned at B33-34 to gain another run to the BO-10 for our exits as a flag developed off B38-39.  It expanded into a PB to the BO 5 (rule:  a level FBO is likely to PB and test the prior level).  Buyers entered at B61-62  and again at the HL (higher low) at B73.  BO-10, day done.